There are three parties involved in a surety bond – the principal, the obligee and the surety or the guarantor. The principal is the one who needs and purchases the bond, the obligee is the person who requires the bond and the surety is the company which sells the bond. Under this bond, the principal is bound to act according to certain rules, if the principal is failed to do so then the bond helps to recover the loss, protecting the obligee. The surety bonds are purchased by business owners or contractors. A surety bond provides assurance that the contract will be fulfilled in accordance with some common terms. The surety bond helps in protecting the consumer from fraud. When the principal doesn’t do his duties according to the term, the recovery can be done by the party which is harmed.
If you are also looking for the surety bonds at low prices, consider the Bond Express. They can are the best you can get. You can fill the application online only. They will instantly review your application. They will find out the possible options for you and answer as soon as possible. While other agencies back themselves, they could provide you the bond.
The surety bond can provide several advantages to you as well as the contractor:
For a client:
- The contractor will be bound to the surety under surety bond and also protect the contractor in case of dispute with the obligee.
- More tenders can be submitted by the contractor because of the increased leverage, which may lead to the addition of more contacts.
For a contractor:
- If a contractor is able to complete his project, it will increase his reputation.
- There is full freedom for the contractors to use any assets for the growth of the business as no substantial security is required in case of surety bond.
- A surety bond company can also offer help to the contractor technically or financially.